Listen to Estate Assets
This week on Hull on Estates, Natalia Angelini and Sean Graham discuss issues that surround estate assets. The value of some assets are not always determined by their financial value and the value of other assets may change dramatically over time.
In Ontario, a valid Holograph Will, by definition, is made and signed entirely in the handwriting of the testator. While this sounds simple enough, such documents often invite litigation.
For the person propounding such a Will, the first objective is to prove that the handwriting is that of the alleged testator. Of course, another distinctive feature of a Holograph Will is the absence of witnesses. Proving the identity of the author of a Holograph Will therefore usually requires expert analysis of the handwriting. The expert may encounter difficulties. Rather than writing a Holograph Will in her ordinary handwriting, the testator may have printed the document.
To successfully prove the handwriting of the testator, an expert typically requires several samples of the testator’s signature and writing style. In the absence of such samples (and in the absence of witnesses) it is far from a certainty that the Will can be proved. Further complicating matters is the absence of the original.
While a copy of a Will can be proved in the right circumstances, the absence of witnesses makes it more difficult to prove a copy of a holograph will. On a final note, Holograph Wills frequently give rise to questions of interpretation.
Until next time,
Today, it is quite common for Canadians to own property in the U.S. or other foreign jurisdictions. Having multiple Wills may help protect a testator’s Canadian assets from foreign tax claims, as illustrated in the British Columbia case of Barna Estate (1990), 40 E.T.R. 89 (B.C.S.C.).
In the Barna Estate case, the deceased died owning real property in Europe and substantial personal assets in Canada. The deceased had lived and died in France. She left two Wills. One was a French Will, dealing with her real property in Europe. The second was a Canadian Will, dealing with her cash, bonds and other financial assets in Canada. None of the beneficiaries under either Will were related to the deceased.
Under the applicable French law at the time, beneficiaries not related to the deceased could be liable to pay a 60% tax on the value of the deceased’s worldwide estate.
Canada Trust, the executor named in the Canadian Will, brought an application for the court’s advice as to whether it should pay all debt and succession duties in respect of property passing under both Wills, or whether it should only pay Canadian succession and death duties in respect of property passing under the Canadian Will.
There is a presumption that a testator’s intention is for the law of the jurisdiction in which she resided at the date of execution of a Will shall apply. In this case, the deceased was living in France at the date of execution of the Canadian Will, and according to the presumption, the Will should be interpreted in accordance with French law. However, the presumption is a rebuttable one, and the court ultimately found that the deceased had intended that her Canadian Will be governed by the law of British Columbia.
Once the court decided that the Canadian Will was governed by the law of British Columbia, the court had to interpret the payment of taxes clause in the Canadian Will. Given, among other things, that the deceased’s European property was specifically excluded from the Canadian Will, the court ruled that Canada Trust, as trustee, was only required to pay the death and succession duties in respect of property passing under the Canadian Will.
Have a great day!
Bianca La Neve
There are some solutions for resolving the problems of conflict of interest between directors in the director/trustee role which I’ve been discussing in the last three blogs. Some of the potential solutions are as follows:
1. Muliple executors – where there is at least one trustee who has an inherent conflict of interest, that conflict can be balanced out by having one or more co-trustees who can generally put the interest of the trust first without valid conflict of interest problems. That way, the beneficiaries who complain about the conflict of one trustee can be answered by the fact that that trustee was outvoted by the other two in any event. The trustee with a conflict might even decide not to vote on decisions that invoke the conflict of interest.
2. Disclosure of information to beneficiaries on an early and comprehensive basis – is another way to avoid allegations of conflict of interest. At the very least, beneficiaries can be canvassed to see whether there is going to be a problem with a particular decision. If they fail to object, it is somewhat less likely that they will do so later on and the Court may have sympathy for an executive that gave them the chance before making the decision.